Texas Instruments (TXN) Shares Surge on Beat-and-Raise, Analysts Positive

January 26, 2022 7:09 AM EST
Get Alerts TXN Hot Sheet
Price: $167.62 -1.57%

Rating Summary:
    19 Buy, 19 Hold, 6 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 4 | Down: 15 | New: 7
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Shares of Texas Instruments (NASDAQ: TXN) are up 4.5% in pre-market Wednesday after the chipmaker reported better-than-expected fourth-quarter earnings and robust demand in the industrial and automotive markets.

The semiconductor company reported a net income of $2.14 billion for Q4, or $2.27 per share. Revenue grew by 19% year-over-year to $4.83 billion, beating the analysts’ expectations of $4.43 billion, or $1.95 per share.

The profit report showed that the company’s sales of analog electronics climbed 20% to $3.76 billion from the year-ago period, topping the analysts’ consensus of $3.5 billion. Sales of embedded processors jumped 6% to $764 million, compared to the estimated $698.5 million.

As for Q1 2022, Texas Instruments expects revenue between $4.5 billion and $4.9 billion, outshining the estimated $4.37 billion.

“These trends have resulted and will continue to result in growing chip content for application, which will drive faster growth compared to the other markets,” said David Pahl, head of investor relations at Texas Instruments.

KeyBanc analyst John Vinh reiterated an Overweight rating and a $240.00 per share price target as results showed strong demand.

“Management commentary indicates healthy demand trends sustained, consistent with last quarter, and were broad-based across all geographies and most end markets. Similarly, TXN noted customer expedites increasingly remain focused on parts that complete a matched set vs. being broad-based. We also believe price increases were a tailwind as 4Q GM exceeded consensus expectations by 220 bps,” Vinh said in a client note.

Raymond James analyst Chris Caso also maintained an Outperform rating and a $230.00 per share price target on TXN following very strong results.

“TXN posted a strong quarter and guidance, posting revenue about 10% ahead of guidance and guiding about 8% ahead of consensus, with the company noting that the upside was broad based. That’s a reversal from last quarter, when TXN failed to deliver upside, which began to fuel a bear case on the stock. As we noted ahead of the quarter, we disagreed with that bear case due to pricing (we believe TXN began to implement price hikes in Oct), and some company-specific covid-related production issues that had prevented upside in 3Q but have now been remedied,” Caso wrote in his report.

By Senad Karaahmetovic | [email protected]

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